Divorce is one of the most stressful experiences a person can go through. Another big decision you have to make is should you sell your house during divorce.
Many people want to keep their house after separation. Sometimes, a compromise can be made and you can both agree what will happen to your mutual property. On other occasions, the court has to be involved. Still, most people decide to sell their house during divorce. Keeping a house means keeping all these memories that you probably don’t want to cling on. Still, if you aren’t sure whether or not you should sell your property, here are five questions you should ask yourself before.
1. Can I Afford this House on My Own?
The most important question you should ask yourself is whether you can afford the house on your own. Owning a house is expensive, especially if the mortgage was calculated using two incomes. Now you’ll likely have to pay it alone. You have to ensure you’ll have a large enough budget to make your monthly payments, while also leaving some amount of cash on the side in case of an emergency. You should note that there is always a chance you will have to pay the alimony or child support – or both. Most of the time, it’s financially better to simply sell your house during divorce.
2. What Is the Martial Value of Your House?
The martial value of your property is determined according to its overall value, and the marital portion of that value. In other words, the value of the property is the amount of equity you have in it – or rather, the money you’d have left after you sell your house and pay for the mortgage and any other home equity loan. The martial value is the amount of equity you have earned since the date you tied the knot. Typically, who has more equity, he or she gets to keep the house. This, of course, isn’t set in stone, and the court may determine otherwise.
Keep in mind that calculating the martial value isn’t as easy as it seems and you should hire a professional. You don’t want to make a misstep in such an important task.
3. Can I Refinance the Mortgage?
If you decide to keep the house, you’ll likely want to be the only owner of it. In other words, you should get your spouse’s name off the mortgage. To do so, you have to refinance your mortgage. This isn’t mandatory, as you may agree that your spouse is still liable for paying the mortgage. However, most former spouses won’t agree on paying the house they no longer own. Especially since if you miss a monthly payment, your spouse’s credit will go down. On the other hand, if your spouse doesn’t pay its share, your credit score will be damaged, as well. This is why you shouldn’t agree on becoming the sole owner until you refinance your mortgage.
However, mortgage refinancing is so complicated and costly that you’ll likely simply opt to sell your house during divorce. First off, your income has to be high enough to support the entire mortgage. Support payments usually aren’t considered an income until a few months have passed, which means chances are high you won’t be able to refinance in several months. Also, if the interest rates go up, your payments can increase as well. None of these options aren’t in your favor.
4. What Are the Pros and Cons of Selling My House Now?
Even if perhaps you don’t necessarily want to sell your house now, you have to look at various pros and cons and which are more important for you. If you sell your house now, you’ll end the debate over your house and you’ll be able to finish your divorce quickly. This also eliminates a huge amount of expenses for both of you – and more than that, both you and your spouse will gain a lot of profit from selling your house. Not to mention that none of you will end up stuck with a house they probably don’t really want.
Of course, if you sell now, you will have to sell according the current market prices. This is the biggest reason why you may be worried to sell your house during divorce. Not to mention how overwhelming this process feels. However, the burden of reliving your marriage memories is typically enough motivation to help you get through with it.
5. Is There Some Intangible Factor I Need to Consider?
In the end, everyone has a different story. You should stop and think is there some factor you should consider before you decide to sell your house during divorce. For example, maybe your house will cost you a lot of money as the time passes. If this is the case, you really shouldn’t keep it, especially if you worry about your income. On the other hand, maybe you have kids who are connected to this property and you fear moving will cause more stress on them in such a difficult time.
The decision whether or not you should sell your house during divorce or keep it is up to you alone. You should look at these five questions and spend a lot of time brainstorming what would be the best for you and your situation. Most people decide to sell their house to a local direct buyer in Milwaukee, as this is the fastest way to go on with your life. The decision is up to you.